Redevelopment ghosts haunt New Year

New initiative would bring back shut down agencies

Ground was broken in January on the North Embarcadero Visionary Plan's first phase on the downtown waterfront -- one of the last redevelopment projects to get going before redevelopment agencies went out of existence Feb. 1
— John Gastaldo

Ground was broken in January on the North Embarcadero Visionary Plan's first phase on the downtown waterfront -- one of the last redevelopment projects to get going before redevelopment agencies went out of existence Feb. 1
— John Gastaldo

SACRAMENTO  California’s 1940s-era urban-renewal program, known as “redevelopment,” died an unexpected death in June 2011 when Gov. Jerry Brown signed a law killing the agencies. But redevelopment’s longtime critics have had a hard time celebrating their victory given the endless efforts to reanimate it.

First, redevelopment supporters took their case to the state Supreme Court, but the justices in December 2011 OK’d the law ending the program and overturned a related law that would have allowed the agencies to exist in a different form.

Then in 2012, the Legislature passed several bills to bring back redevelopment, but Brown vetoed them. In 2013, Senate President Pro Tempore Darrell Steinberg’s bill (SB 1) to bring back Redevelopment Lite didn’t even make it to the governor’s desk. But as we start 2014, redevelopment supporters are again trying to bring RDAs back — not just in the Legislature, but on a statewide ballot.

It’s “ghost-like” because it’s hard to find much information about the measure. The spokesperson for the League of California Cities — among the biggest supporters of redevelopment — was unfamiliar with it. The Voice of OC Web site reported in September that measure supporters were seeking donations directly from city councils, but little else is known.

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With redevelopment law, city officials identify an area as “blighted.” Then they can float debt to pay for improvements in that targeted area, use eminent domain to clear the way for new construction and provide subsidies for new projects. Originally designed to pump resources into slums, redevelopment evolved into a means for cities to subsidize auto malls and other businesses that flooded city coffers with discretionary cash. It primarily became a means for cities to fund their services.

No one disputes the abuses, but redevelopment supporters argue that the process has indeed breathed life into decrepit areas, including the Gaslamp Quarter. The new initiative argues that redevelopment “allows locally generated property tax revenues to create jobs, build affordable housing and rebuild neighborhoods.” Critics say it’s a crony capitalist cash cow that abuses property rights.

The new initiative would allow the “blight” designation for basically any reason, including "depreciated or stagnant property values.” The definitions are so aggressive that Marko Mlikotin, president of the Folsom-based California Alliance to Protect Private Property Rights, believes that this may be less of a serious initiative and more of “a ploy to put pressure on the governor to sign SB 1 next year.”

Brown abolished the agencies as a means to divert money away from these economic-development projects and toward traditional public services. His action in the midst of a budget crisis was a reminder that dwindling resources can spark unexpected reform by forcing tough choices.

So redevelopment opponents are worried that, in a time of predicted (but questionable) future budget surpluses, state leaders wouldn’t have any problem resurrecting this now-moribund idea given that they killed redevelopment for the money, not because they opposed it in principle. Some redevelopment foes are less worried, because a new law would create new agencies — and it might take years to amass the resources to be a problem again.

Meanwhile, California Controller John Chiang is hammering the final nails in the old “redevelopment” coffin as he forces cities to repay assets they may have improperly transferred shortly before and after Gov. Jerry Brown signed the law killing the agencies. Some cities tried to protect “their” redevelopment assets when they saw the end in sight.

We’ve all seen those movies where some ghoul terrorizes a family but just can’t be killed. For now, redevelopment remains dead. In the New Year, we’ll see whether its spirit can ever really be vanquished.